Regular reader know my long standing policy advice that averting disaster for now – kicking the can down the road – is the essence of success. In part, I want to use this example to highlight why this makes sense.Now, Karl is obviously a sharp guy, and I don't have the background to quibble with his economics, but this kind of pop-psych declaiming about the appropriate scope of arguments is one of his most annoying habits. He just casually rules out any sort of future large-scale prediction as a priori impossible, and justifies it in a completely ad hominem way: we can safely ignore any prediction past the medium term, because people making such arguments are really just trying to boost their own status.
There are more things on heaven and earth than are dreamt of by any policy maker, or blogger. Few people know how the medium and long term will actually unfold and I hope I am not waxing to Hanson-esque to say that arguments about the long term are really arguments about the arguers status.
If we actually want to help the world, we focus on details and that usually means the short term. Things we can see closely and understand the nuances of. In short, we Stop Disaster.
Now, some of that is undoubtedly true, and probably applies to all public writing. Vain status-seeking is a powerful motivator--just look inside a gym sometime. As Orwell said, "all writers are vain, selfish, and lazy." But let's take Smith's leg-sweeping one step further. Is arguing that all cosmic predictions are 100% status-seeking itself a kind of status-seeking? After all, declaring a sizable percentage of economic predictions—and a bunch of academia too—to be entirely about self-aggrandizement is pretty derned cocky. Further: by suggesting this, am I also status-seeking? (Well, yeah.) Does this have fuck-all to do with whether any argument is true? Nope.
This kind of infinite regression, "arch-meta...heavily footnoted, winky-winky, self-conscious-about-its-winky-winkyness, too-clever-by-half, drunk-on-postmodern-hijinks" stuff is what makes David Foster Wallace such a pain in the ass on occasion. Sometimes you have to stand up, brush your shoulders off, decide to forget about all that meta-psychological shit, and give each argument an honest consideration. After all, if we look at history, sometimes people do get the big things right. Here's Milton Friedman on the Euro in 2000:
I think the euro is in its honeymoon phase. I hope it succeeds, but I have very low expectations for it. I think that differences are going to accumulate among the various countries and that non-synchronous shocks are going to affect them. Right now, Ireland is a very different state; it needs a very different monetary policy from that of Spain or Italy...He nailed that prediction. It was almost completely correct. If Europe had followed his advice, things would have turned out very much better in the long term. Was that status-seeking? What was it, a coincidence? One could also posit that the desire for higher status might motivate people to make predictions that turn out to be correct. In any case, who cares? This kind of question is impossible to answer.
You know, the various countries in the euro are not a natural currency trading group. They are not a currency area. There is very little mobility of people among the countries. They have extensive controls and regulations and rules, and so they need some kind of an adjustment mechanism to adjust to asynchronous shocks—and the ﬂoating exchange rate gave them one. They have no mechanism now.
If we look back at recent history, they’ve tried in the past to have rigid exchange rates, and each time it has broken down. 1992, 1993, you had the crises. Before that, Europe had the snake, and then it broke down into something else. So the verdict isn’t in on the euro. It’s only a year old. Give it time to develop its troubles.
The ironic thing is that Smith himself is sometimes prone to the worst kind of boneheaded big-picture projections. Take this stunner of a post from last December:
Nonetheless, we should pursue the development of fossil fuels as rapidly as possible including looking for ways to streamline regulation in North American regarding fossil fuel production...This was memorably skewered by James Wimberley:
Lastly, and this will persuade few people but it is important, 100 years is a long time in the industrial age. However, it is simply forever in the information age. There is an extremely high chance that the very nature of human society itself will have changed by that time in ways that render this entire issue moot.
Read the whole thing as a fine example of yahoo values, data-free scaremongering and reckless optimism, and an indifference to economic reasoning.
The last paragraph cited is self-refuting. It´s very likely to Smith that humans will stop needing food, transport, consumer durables, heating and cooling, and shelter because of an unspecified information singularity, as in Charles Stross´ SF romp Accelerando. On the other hand, the risk of population losses on a genocidal scale as a result of well understood and carefully modelled climatic processes can be ignored.Anyway, what I'm trying to say is that I am not remotely convinced that kicking the can down the road is the essence of success. Sometimes it is possible to see, with some margin of error, what will happen on a grand scale. Right now it looks to me like the Eurozone was a crazy idea that could never have worked and will never work, and that Ireland, and Portugal, and Greece and Spain and Italy et al, will be forever doomed to poverty so long as they remain inside. Kicking the can, therefore, looks like it will just postpone the inevitable.